Producer Price Risk and Quality Measurement

摘要: Risk-averse farmers in the produce industry grow a product whose market price is often quite unpredictable. Shippers or other intermediaries shield farmer from much of this risk; however, actual contracts between growers and shippers vary considerably across commodities residual risk face. We hypothesize that imperfect quality measurement results moral hazard problem, provides additional information regarding quality. As consequence, an efficient contract does not all idiosyncratic risk. examine hypothesis for case fresh-market tomatoes.